KUALA LUMPUR – The ringgit rebounded against the US dollar at the opening today, following positive sentiment that the government has allowed businesses to operate during the nationwide state of emergency, which is expected to last until August 1.
At 9.02 am, the local currency traded 120 basis points (bps) better at 4.0430/0480 against the greenback from yesterday’s close of 4.0550/0600.
An analyst said those working in the essential services sector, as well as industries and businesses that are allowed to operate in areas under the movement control order (MCO), are relieved, as the emergency proclamation will not hamper their operations.
Axi chief global market strategist Stephen Innes said after experiencing an initial knee-jerk reaction on the proclamation, the local note took a decidedly positive turn on both the recent Federal Open Market Committee’s push back on talking bond taper and gains in commodity prices, especially oil prices.
“The general fade play here is that lockdown is being viewed as a speed bump, and it presents a near term risk that could limit the ringgit strength for a while, as the MCO pushes back the economic recovery a touch.”
However, the ringgit traded lower against other major currencies.
It fell against the Singapore dollar to 3.0555/0595 from 3.0535/0575 yesterday, and depreciated against the yen to 3.9003/9058 from 3.8927/8978.
Vis-a-vis the pound, the local currency declined to 5.5260/5336 from 5.5156/5236 at yesterday’s close, and weakened against the euro to 4.9357/9422 from 4.9313/9378. – Bernama, January 13, 2021
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